DUBAI/NEW DELHI (Reuters) – India signed an economic partnership agreement with Oman on Thursday to boost bilateral trade and investment as it seeks to expand Middle East ties and diversify trade to beat steep US tariffs.
Oman has offered zero-duty access on over 98% of its tariff lines, covering nearly all Indian exports, including gems and jewellery, textiles, pharmaceuticals and automobiles, the Indian trade ministry said in a statement.
India, in turn, will cut tariffs on about 78% of its tariff lines, covering nearly 95% of imports from Oman by value.
India and Oman have annual trade of more than $10 billion.
The relationship is important for New Delhi as the Gulf nation is a gateway to the narrow Strait of Hormuz between Oman and Iran, a major transit point for global oil shipments.
“This (pact) will set a new pace of our trade, add new trust to our investments and open doors to new opportunities in many sectors,” Indian Prime Minister Narendra Modi said in an address in Oman.
The pact, India’s second after one with the United Kingdom this year, will help Indian goods enter new markets as exporters intensify diversification efforts to defy US President Donald Trump’s punishing tariffs.
OMAN’S FIRST BILATERAL AGREEMENT SINCE 2006
This is Oman’s first bilateral agreement since its 2006 deal with the United States.
After talks fell apart, Trump doubled duties on Indian goods to 50% in late August, the highest in the world.
The hike included a 25% levy that was in retaliation for India’s purchases of Russian oil.
Despite negotiations, New Delhi has been unable to close a deal with the US or the European Union this year, as initially intended.
The deal is “as much about geopolitics and regional presence as it is about tariffs,” said Ajay Srivastava, founder of the Global Trade Research Initiative.
The pact will boost gem and jewellery exports which could rise from $35 million to about $150 million over the next three years, said Kirit Bhansali, chairman of Gems & Jewellery Export Promotion Council.
Sensitive items including dairy, tea, coffee, rubber and tobacco have been kept out of the pact. The pact also offers an opportunity in Oman’s $12.5 billion services import market, in which India currently holds just a 5.3% share, the statement said.
